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Greening CPS Energy

Revolutions have a way of moving history along by chapters at a time. They also tend to leave more than a few bodies in their wake.

Despite the cautious pace of our local utility, the green-energy revolution now underway — the so-called Third Industrial Revolution championed by economist and sustainability guru Jeremy Rifkin and subscribed to by City-owned CPS Energy earlier this year — will not be an exception. Already the power struggle within the utility is apparent on several fronts.

As management prepares to bid an early farewell to CEO Milton Lee, who some suggest was hurried out the door for his failure to get in line with the new priorities, its first ever “sustainability officer” is climbing aboard. Meanwhile, its investment in new nuclear-power possibilities climbed to $276 million this year, even as solar-power and conservation commitments appear to be faltering.

The first shock came when commercial and residential solar-rebate programs ran out of funds in January even as San Antonio was ushered into the U.S. Department of Energy’s Solar America Cities program. Then, last week, Steve Bartley, acting general manager of CPS, said a proposed 100-megawatt solar farm would likely be recalled. While the alternative solar vision — a variety of smaller solar projects spread throughout the city — was embraced conceptually at a two-day workshop last week with Rifkin and a collection of some of the world’s top sustainability experts, the news has been met with suspicion by local solar-energy advocates.

“CPS went on record as wanting to develop a 100-megawatt centralized solar installation,” said Bill Sinkin, the celebrity-grade 95-year-old founder of Solar San Antonio. “Should that commitment be revised and broken up into smaller projects, then the installation rate should still call for rapid completion of 100 megawatts.”

Nonetheless, the CPS-Rifkin sustainability workshop, intended to guide CPS and the City into a deeper reliance on renewable resources, concluded with the enthusiastic endorsement of San Antonio Mayor Phil Hardberger.

“The old way is death,” Hardberger told the gathering at its closing session. “The new way is life.”

Of course, the “old way,” by the reckoning of the many high-profile consultants who gathered in San Antonio last week, includes nuclear power.

Though most of Rifkin’s team politely soft-shoed around the utility’s well-known nuclear ambitions, Angelo Consoli, European director for Rifkin’s consulting operations, offered the most direct public challenge to the utility.

“In a revolution, somebody’s got to remove `the old ways`, or what’s left of them,” Consoli said. “We’ve got to know what kind of interests we are defending. Who are we standing for and who are we standing against?

“I believe in nuclear power, too, but this kind of nuclear power,” he added, gesturing to a Powerpoint image of the sun.

Colin Harrison, an energy and environmental director on IBM’s corporate strategy team, suggested, “It would be probably beneficial to try to move megawatts to energy sources that do not consume water. So, wind, photovoltaics, solar.”

Both nuclear power and carbon-capture technology, also being explored by CPS, are heavy water users.

Meeting with reporters after the workshop’s conclusion, Rifkin sought to dismiss the apparent conflict between CPS’s newly adopted values and its apparent nuclear course by emphasizing that since CPS has embraced his “Four Pillars” — energy efficiency, renewable energy, buildings that double as power plants, and smart grids — residents should judge the utility strictly on its actions from this point forward. Yet, even by that metric, it’s definitely not all roses — or thorns.

CPS officials announced recently they would raise their reliance on renewable energy from today’s eight percent to 20 percent by 2020 — the goal the European Union is pursuing. The utility, already a leader in wind, has expanded on its reliance on renewables by contracting for future wind energy from the Gulf Coast and funding small-scale solar power projects, but it has yet to send the unmistakable signal that the so-called “European Model” of energy efficiency and green power has truly arrived in San Antonio.

As a city-owned utility that turns over 14 percent of its income to San Antonio’s coffers, it’s difficult to pull money together for major new investments, CPS Board Chair Aurora Geis said last week. However, the utility is considering socking away one percent of its revenue in a renewable-power pool, as it does already for a fund dedicated to burying city power lines. Unfortunately, that only represents about $8 million per year. And “eight or nine million a year ain’t gonna do a whole heck of a lot for a 20-percent plan,” said Skip Laitner, director of economic and social analysis for the American Council for an Energy-Efficient Economy. “We’re going to have to think a little bit bigger.”

A report exploring the impact of Texas energy policies on water resources issued this month by the University of Texas and the Environmental Defense Fund suggests that improved efficiencies in both water management and energy use will be key in preparing for future population strains.

“Improving water efficiency will reduce power demand and improving energy efficiency will reduce water demand,” the authors conclude. “Greater efficiency in usage of either energy or water will help to stretch our finite supplies of both, as well as reduce costs to water and power consumers.”

Unfortunately, efficiency is another area in which CPS has talked the talk, but failed to back it up with action. Last year, the utility pledged to spend $685 million over 12 years to reduce the city’s energy consumption. However, a low-income weatherization program is capped at 60 homes and a broader Home Efficiency Program has been defunded.

Advocates of energy efficiency complain that while such vital conservation programs have suffered, CPS’s investment in expanding nuclear power has already reached $276 million — enough, according to local environmentalists, to weatherize 55,000 homes. The full pricetag for the two proposed plants could easily surpass $15 billion without the federal subsidies CPS is competing for.

Bartley insisted the failure to fund the efficiency and solar-rebate programs was not related to the utility’s failure to gain the full five-percent rate hike it sought from Council last year. And he expects Council will approve “within a month” a way to bill its customers for those program costs through the fuel surcharge, activating the programs once more. One City employee suggested it has been Council’s unwillingness to debate what amounts to a rate increase (even at an initial cost of 3 cents per home, per month) during an election year that is to blame for the stranded programs. But that doesn’t explain why CPS would launch a program without funding already in place.

“We have so many projects lined up now, the snowball has started and we can’t stop,” Bruce Evans, director of customer solutions and delivery for CPS, said at the energy workshop last week. “Continuity of funding for these program is so, so critical.”

The embarrassing state of CPS’s efficiency and solar programs was not shared at the workshop. Neither did the subject come up during my visit to the U.S. Department of Energy’s Solar America Cities conference held in San Antonio the week before. It just floated beneath the surface, a sad and ironic reality tainting every positive remark lauding the utility.

Judging from other remarks made at the Rifkin conference, the most likely reason CPS is sidelining the 100-megawatt solar farm is its failure to translate the project into jobs.

John Bonnin, manager of wholesale energy for CPS, told last week’s workshop participants that not a single one of the companies bidding for the project has been willing to help create jobs in San Antonio.

“We brought home very clearly to them in terms of our desire to bring some supply-chain activities to San Antonio. But the willingness to commit to anything substantial really just wasn’t there,” Bonnin said. “Finally, I kind of pinned them down and ‘What would it take?’ And one said there’s no photovoltaic manufacturer that’s going to relocate a plant for anything less than 100 megawatts per year for 10 years, which is clearly above any kind of commitment we have at this point.”

While supporters of the renewables revolution have expressed dismay and confusion over CPS’s apparent decision to move away from large-scale solar, particularly as it follows the collapse of the solar rebates that have pushed local installers into the Rio Grande Valley in search of work, the decentralized approach was warmly received by Rifkin and his team.

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CPS’s Acting General Manager Steve Bartley says the utility is hindered in its green mission by its low electric rates.

Rifkin described how a 100-megawatt solar plant in Sicily was similarly split apart when Sicilian President Raffaele Lombardo announced that he favored the decentralized model.

“That’s the kind of model you want,” Rifkin said. “You can’t talk distributed energy and then not have … local business be in control of it.”

CPS’s official request for proposals on the solar farm was for supplying the city with “up to” 100 megawatts, Bartley emphasized Monday morning. Members of the local solar community have taken the number too seriously.

Even though none of its bidders met CPS’s bottom line, a larger solar project is not completely off the table, Bartley insisted, but he wouldn’t speculate about how large the field could be or if CPS was committed to reaching 100 megawatts this year or next.

“If there was an expectation we would go out and do a deal for 100 megawatts, that was probably a little unrealistic,” he said. “We are thinking seriously about going back out and trying to encourage more of a local presence with respect to solar — either a manufacturing facility here or some kind of presence that might generate some local jobs.”

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Sustainability guru Jeremy Rifkin delivers some final remarks at last week’s sustainability workshop.

Because of CPS’s already low rates and lack of investment on a federal and state level to bring renewable-energy prices down, CPS can’t move as fast as it would like, Bartley said.

“We’re in a bit of a catch-22,” Bartley said at the workshop. “On the one hand, we really do want to be a flagship city on the road to the Third Industrial Revolution. The catch-22 is that among the major metropolitan areas of the country, we have the second-lowest price-per-kilowatt-hour for our residential customers.

“Our dilemma is how we close that `investment` gap. I would suggest to you that the way to not close that gap is just to raise prices in San Antonio to try to help make up this difference.”

That closer got a few workshop laughs.

So, while CPS is moving toward the Rifkin model, Bartley tells staff that it is still “futuristic.”

“The Rifkin model is a very futuristic model. We all have a belief that this could be the right answer to all of our energy issues, perhaps 40 to 50 years in our future. Hopefully sooner if technology can get us there sooner,” he said.

He told last week’s panelists, “Frankly, CPS Energy, we will be transforming our business completely over the next 30 to 40 years and I don’t doubt we will be able to make a business case for that transformation.”

In just one week your revolution has been bumped by a decade.

It’s no coincidence Rifkin’s teams have recorded their biggest successes working with European states and utilities, where energy prices are higher to begin with and financial incentives for green-power solutions more substantial. Renewables in Europe are expected to match the cost of traditional energy sources by the time San Antonio could be mainlining power from two new nuclear plants — about 2018. It’ll take a few more years than that for renewable prices and energy storage to catch up in Texas, Bartley said. So does he believe there is any way aggressive efficiency measures and renewable power could eliminate the need for nuclear, as groups like the American Council for an Energy-Efficient Economy have suggested?

“I don’t see it doing it in the near term, no,” he says. “Let me restate that. We haven’t made a decision on nuclear. I don’t think `renewables and efficiency` change the need for traditional resource in the near term.”

However, if the current two-percent rate of renewable-energy growth continues, the combination could eliminate the need for another new power plant the utility would otherwise have to build by 2025.

“I know a lot of folks feel like, ‘Here’s your big opportunity to do something. And if you don’t, if you use a traditional resource – when will you ever?’ Well, you know, if our community continues to grow as it has been growing, we’re going to need another pretty large facility in 2023, 2024,” Bartley said. “When I say that renewables will not be able to fill in for our most immediate gap, it doesn’t mean that next gap won’t.”

Rifkin’s group will be returning a report to San Antonio in about six weeks. Given the constraints of both federal and state rebates, expect some creative thinking to go into how the city can partner with surrounding towns and the business communities to bring solar to South Texas in fuller measure.

We can expect much hoopla when the 200-killowatt demonstration solar array being affixed to the rooftop of the Pearl Brewery is dedicated this spring. It will, in fact, be the largest in the state — at least until Austin’s recently approved 30-megawatts goes online. Turning 10 years old this year, Solar San Antonio has seen its city funding gradually increase as solar power has grown from fringe status to a hot campaign issue. But recent activities within CPS are still not completely clear to its founder.

Sinkin shares with me news from out West.

Pacific Gas & Electric in California has embarked on 500 megawatts of solar. Arizona Public Service is on track for 280 megawatts. And San Antonio, Rifkin’s chosen flagship of the Third Industrial Revolution, what is their commitment?

“I really don’t know,” he says.

Neither, it would seem, does CPS. •

Sunny spots

Most likely, CPS is saving up its sunniest, good news to blitz Solar San Antonio supporters at “Solar Fest” on May 2.

Should they miss that deadline, perhaps they’ll drop a carbon-free bomb on Bill Sinkin’s birthday bash at the Pearl Stable on May 19.